Tuesday, October 26, 2010

On June 4, 2010, the U.S. Environmental Protection Agency (EPA) proposed Maximum Achievable Control Technology standards for boilers (the “boiler MACT”), as Congress required in the 1990 amendments to Section 112 of the Clean Air Act. Boilers are used as power sources throughout industry and for power or heat by large commercial and industrial establishments as well. Thus, there is widespread interest in the proposed rule’s requirements and their potential effects.

EPA proposed the regulations because it has found, based on emissions data, that boilers (including coal-fired and biomass-fired boilers) are major sources of hazardous air pollutants (HAPs). The Clean Air Act defines a major source as any facility that emits 10 tons or more of a single listed HAP or 25 tons of any combination of HAPs annually. The HAPs themselves (187 substances) were listed by Congress in the 1990 Clean Air Act Amendments.

The proposed rule would replace a rule promulgated September 13, 2004, and subsequently vacated and remanded to the agency by the D.C. Circuit Court of Appeals. EPA is under a court order to promulgate a replacement rule by January 16, 2011. Existing facilities would then have three years to comply with the standards, unless the courts intervene again.

EPA estimates that the rule would affect 13,555 boilers and process heaters, with capital costs of $9.5 billion; annualized costs, which spread the costs of capital over the expected life of the equipment and include operating and maintenance costs as well, are estimated at $2.9 billion per year. A majority of these costs would be borne by coal-fired and biomass-fired boilers, which together account for only 7.4% of all the existing units covered by the rule. In order to comply, the coal-fired and biomass-fired units may need to install fabric filters (also known as baghouses) to achieve control of mercury and particulate matter; wet scrubbers to meet limits on hydrogen chloride and other acid gases; replacement burners, tune-ups, and combustion controls for carbon monoxide and organic HAPs; and carbon injection for mercury, dioxins, and furans. Most boilers – 85% of those affected by the rule—are fueled by natural gas. Natural-gas-powered boilers would experience cost savings under the rule, according to the agency.

EPA estimates that the benefits – including the avoidance of 1,900 to 4,800 premature deaths – would outweigh the costs by at least $14 billion annually. Nevertheless, the affected industries have raised a number of objections to the proposal. Besides the potential economic impacts, one issue is whether EPA should have identified additional subcategories of the boiler universe, giving it greater flexibility to set less stringent standards. Others maintain that the agency should have exercised its authority to set less stringent standards for hydrogen chloride and other acid gases (which make up 61% of the total emissions of HAPs) under a subsection of the statute that gives the Administrator flexibility to set less stringent standards for HAPs that have a health threshold (i.e., substances that are not harmful if emitted in amounts below some threshold). Another issue is whether EPA’s method of identifying the emissions of the best performing existing units correctly interprets the agency’s authority under the statute. Each of these issues is discussed in this report.

Numerous congressional offices have written the EPA Administrator concerning the proposed rule. EPA must address these and other public comments when it promulgates the final version, expected in January. Following promulgation, interested parties have 60 days to file a petition for court review.

Date of Report: October 21, 2010
Number of Pages: 16Order Number: R41459Price: $29.95

Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Pressor call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.